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17/06/2007 | Technical bids for infra projects to be dropped

Agencias

Private sector companies bidding for infrastructure development projects will now be evaluated only on the basis of financial bids instead of the present system of grading based on both technical and financial bids.

 

This will help the government avoid a fracas in future similar to the one created over the bidding for the Mumbai airport project, when companies contested the government’s decision to award the project on technical grounds.

At present, a public-private partnership (PPP) technical bid is opened first and carries a greater weight. The criteria of submitting a technical bid in the pre-qualification or request for qualification (RFQ) stage has already been done away with.

The new norms would be reflected in the request for proposal (RFP) document, which is currently being drafted. In an RFP document, short listed applicants for a project have to give their final bids for a project.

Explaining the rationale behind the move, a government official said, “We feel that technical bids are subjective and do not give a very clear picture of the bidder’s plans. It would also be a faster and much more transparent way of awarding infrastructure projects.”

With the removal of the technical criteria for bidding, the government hopes to award projects in less than a year, compared to the present system where sometimes projects take as much as two years to be awarded. The move comes as part of the revamp of the bidding process for infrastructure projects carried out through the PPP route. The government wants to come out with a standardised system of bidding for infrastructure projects and is in the process of finalising a two-stage bidding process where the PPP route will be used.

Along with the RFQ document, bidders will be given a copy of the model concession agreement and the manual of standards for the project. This will ensure that applicants know about a contract and the technical norms that they will be expected to follow. They will be given a four-month period to submit their financial bid.

Commenting on the move, Arvind Mahajan, executive director—advisory services KPMG, said, “This will be a faster way of awarding projects. But technical norms should be included for projects in new or specialised sectors, so that it would be easier to differentiate players.”

Financial Express (India)

 



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